When a senior citizen walks into a bank branch and asks to add a son or daughter or other person to his/her account, that should spark questions.  Why would you like to add son/daughter to the account?  Would you like son/daughter to be able to write checks and access funds for you or do you want to share the account with him/her?  Are you comfortable with son/daughter automatically becoming the sole owner of the account if you die before him/her?  Are you comfortable understanding if he/she is a co-owner and he/she gets sued, the party suing him/her may seek the assets in the account?

Let’s continue using our senior citizen as an example.  If our senior citizen wishes to have a person able to write checks and conduct business on the senior’s bank account, that may be done without making the person a co-owner.  The senior may choose to execute a power of attorney, making the other person an agent who may act for the senior. The power of attorney may be a general one executed with an attorney.  The power of attorney may be the form the bank provides to name a power of attorney specifically on that bank’s account(s).  Some financial institutions may have other documentation to name an “authorized user” on the account.

Granting a person power to act as one’s agent in most cases is much preferable to naming someone as a co-owner.  The agent has a duty to act in the principal’s best interests (the principal in the one granting authority to the agent).  The agent does not have ownership interest in the bank account.  The main point is to understand exactly what power and authority one is giving when making changes to a bank account.